Pundit’s Mailbag — Be CarefulWhere You Grow

Jim Prevor’s Perishable Pundit, September 9, 2008

Now that the Salmonella Saintpaul outbreak has officially been declared to be over, the world is left to deal with many questions in its aftermath. Some questions involve the food safety system broadly considered, but others are more prudential-related. This letter expresses a concern many in the industry have shared with us:

We have been following your coverage of the Salmonella Saintpaul outbreak like the rest of the produce industry, and I have a question that you might consider addressing in the Pundit.

We, like others, grow commodities in Mexico and have some concerns about vulnerabilities as a result of the recent connection to irrigation water in Mexico. As FDA & CDC continue to investigate and hearings are held on the hill, what do you think the future implications are with regard to red tape in importing produce from Mexico?

In your opinion, can we expect new regs, inspections, etc., when importing produce items from Mexico? I have concerns (I’m sure I am not alone in this) about next steps these agencies will take in their effort to protect public health in the U.S.

We do use the same diligence internationally as we do domestically with regard to third-party auditors, traceback systems, worker safety, etc., in place on our farms. However, I am curious as to what we can expect next and what your feelings are on this issue.

The answer is almost certainly no because such regulation, if applied solely to imports from Mexico, would almost certainly violate both NAFTA and various world trade agreements. These treaties require us to treat all countries equally, and although there are allowances for health and safety regulations they can’t be discriminatory.

So the first thing that would happen is that US farmers would have to be legally required to follow these same standards. So, for example, the US could probably legally require all fresh produce to be produced on farms with GAP audits, but it couldn’t apply such a standard to Mexico exclusively.

Even then we use the word ‘probably’ because the international agreements do not allow a government to just impose uniform requirements; it requires that those requirements be justified scientifically. This is to prevent countries from protecting their domestic markets by creating idiosyncratic regulations for no purpose other than to make it difficult for foreign producers to obtain market access.

Now, of course, although these rules preclude FDA — or for that matter Congress — from simply imposing special burdens on all Mexican producers, FDA has wide discretion in its ability to investigate individual producers.

In other words, no foreign company has a ”right” to sell into the US market — even if US owned — but Mexico, as a country, has a right, under treaty, to do so. Even on this point, however, FDA cannot act in a discriminatory manner without cause. (We have discussed this topic previously both here and here.) So, a sudden decision to arbitrarily hold for inspection produce from, say, several major producers in the Netherlands, without reason to suspect any problem, could be cause for a WTO complaint.

The problem with these complaint procedures is that they all take a long time. So the complaints are not really effective as a way to address any short term FDA action, but could and would be used if there was an attempt to impose special requirements on Mexican imports.

What may bring about the same result, though, is internal law or regulatory changes in Mexico. What the Salmonella Saintpaul situation did highlight is the bifurcated nature of Mexican agriculture. Top-notch world-class growers — such as our letter writer, California Giant — follow world-class food safety standards. There is, however, another sector of producers in Mexico that don’t seem to follow any standards.

The best way to understand why FDA maintained the ban on Mexican jalapeno and Serrano peppers for so long is as an attempt to send a message to Mexican officials to clean up the act of this "informal" sector of Mexican agricultural.

What the FDA’s behavior has demonstrated — in the spinach crisis, then with this Salmonella Saintpaul crisis — is that one of the risks of producing fresh produce is being lumped in with other producers. Although we have called for it many times, in the event of a foodborne illness outbreak that has not been tied to a specific producer, FDA does not seem able or willing to distinguish between different producers based on, say, their audit status or customer base. Instead it looks to ban produce from the smallest geographical area it can identify as the source of the outbreak.

The logical deduction here is that if a company produces in a region with disproportionate numbers of sub-par producers, one can expect to be disproportionately subject to bans by the FDA.

Mitigating this to some extent is that the FDA seems to only care about foodborne illness in the US, so the question is not really about the overall food safety practices of Mexican producers. It is, instead, only about the food safety practices of Mexican producers who export to the US. Since these are disproportionately American companies producing in Mexico, as well as the best and largest Mexican producers, the chance of a problem is significantly lessened.

Indeed if the cause actually was Mexican jalapeno and Serrano peppers — which we really don’t know for sure — one explanation for the problem was probably that with these small items, not traditionally tied to food safety problems, many come from small growers, often unaudited.

Even in the US, many pepper fields of all types are unaudited. As we saw in the letter Wegmans sent on the locally grown issue, many buyers impose differential standards on “high risk” items and other produce items.

So the comeuppance of all this is that A) The US will not impose differential standards on Mexican production — mostly because international obligations preclude it; B) The FDA can, and probably will, make life difficult for any Mexican producers it has reason to suspect of a food safety problem; C) If there are going to be increased laws or regulations related to Mexican produce, they will probably come from Mexico as it tries to bring its secondary production sector up to international standards; D) Production in the midst of substandard growers increases the risk of any grower — whatever its own standards — being subject to an FDA ban in some future outbreak. This is an argument for being selective about where you grow and of supporting efforts to raise minimum standards.

Many thanks to Cindy Jewell and to California Giant for giving us an opportunity to discuss such important issues.